, 73185-73189 [2020-25459]
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Presidential Documents
Federal Register
Vol. 85, No. 222
Tuesday, November 17, 2020
Title 3—
Executive Order 13959 of November 12, 2020
The President
Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies
By the authority vested in me as President by the Constitution and the
laws of the United States of America, including the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United
States Code,
I, DONALD J. TRUMP, President of the United States of America, find
that the People’s Republic of China (PRC) is increasingly exploiting United
States capital to resource and to enable the development and modernization
of its military, intelligence, and other security apparatuses, which continues
to allow the PRC to directly threaten the United States homeland and United
States forces overseas, including by developing and deploying weapons of
mass destruction, advanced conventional weapons, and malicious cyberenabled actions against the United States and its people.
Key to the development of the PRC’s military, intelligence, and other security
apparatuses is the country’s large, ostensibly private economy. Through the
national strategy of Military-Civil Fusion, the PRC increases the size of
the country’s military-industrial complex by compelling civilian Chinese
companies to support its military and intelligence activities. Those companies, though remaining ostensibly private and civilian, directly support the
PRC’s military, intelligence, and security apparatuses and aid in their development and modernization.
At the same time, those companies raise capital by selling securities to
United States investors that trade on public exchanges both here and abroad,
lobbying United States index providers and funds to include these securities
in market offerings, and engaging in other acts to ensure access to United
States capital. In that way, the PRC exploits United States investors to
finance the development and modernization of its military.
I therefore further find that the PRC’s military-industrial complex, by directly
supporting the efforts of the PRC’s military, intelligence, and other security
apparatuses, constitutes an unusual and extraordinary threat, which has
its source in substantial part outside the United States, to the national
security, foreign policy, and economy of the United States. To protect the
United States homeland and the American people, I hereby declare a national
emergency with respect to this threat.
Accordingly, I hereby order:
Section 1. (a) The following actions are prohibited:
(i) beginning 9:30 a.m. eastern standard time on January 11, 2021, any
transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities,
of any Communist Chinese military company as defined in section 4(a)(i)
of this order, by any United States person; and
(ii) beginning 9:30 a.m. eastern standard time on the date that is 60
days after a person is determined to be a Communist Chinese military
company pursuant to section (4)(a)(ii) or (iii) of this order, any transaction
in publicly traded securities, or any securities that are derivative of, or
are designed to provide investment exposure to such securities, of that
person, by any United States person.
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(b) Notwithstanding subsection (a)(i) of this section, purchases for value
or sales made on or before 11:59 p.m. eastern standard time on November
11, 2021, solely to divest, in whole or in part, from securities that any
United States person held as of 9:30 a.m. eastern standard time on January
11, 2021, in a Communist Chinese military company as defined in section
4(a)(i) of this order, are permitted.
(c) Notwithstanding subsection (a)(ii) of this section, for a person determined to be a Communist Chinese military company pursuant to section
4(a)(ii) or (iii) of this order, purchases for value or sales made on or before
365 days from the date of such determination, solely to divest, in whole
or in part, from securities that any United States person held in such
person, as of the date 60 days from the date of such determination, are
permitted.
(d) The prohibitions in subsection (a) of this section apply except to
the extent provided by statutes, or in regulations, orders, directives, or
licenses that may be issued pursuant to this order, and notwithstanding
any contract entered into or any license or permit granted before the date
of this order.
Sec. 2. (a) Any transaction by a United States person or within the United
States that evades or avoids, has the purpose of evading or avoiding, causes
a violation of, or attempts to violate the prohibitions set forth in this order
is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth
in this order is prohibited.
Sec. 3. (a) The Secretary of the Treasury, after consultation with the Secretary
of State, the Secretary of Defense, the Director of National Intelligence,
and the heads of other executive departments and agencies (agencies) as
deemed appropriate by the Secretary of the Treasury, is hereby authorized
to take such actions, including the promulgation of rules and regulations,
and to employ all powers granted to the President by IEEPA, to carry
out the purposes of this order. The Secretary of the Treasury may, consistent
with applicable law, redelegate any of these functions within the Department
of the Treasury. All agencies shall take all appropriate measures within
their authority to carry out the provisions of this order.
(b) Rules and regulations issued pursuant to this order may, among other
things, establish procedures to license transactions otherwise prohibited pursuant to this order. But prior to issuing any license under this order, the
Secretary of the Treasury shall consult with the Secretary of State, the
Secretary of Defense, and the Director of National Intelligence.
Sec. 4. Definitions. For purposes of this order:
(a) the term ‘‘Communist Chinese military company’’ means
(i) any person that the Secretary of Defense has listed as a Communist
Chinese military company operating directly or indirectly in the United
States or in any of its territories or possessions pursuant to section 1237
of Public Law 105–261, as amended by section 1233 of Public Law 106–
398 and section 1222 of Public Law 108–375, as of the date of this
order, and as set forth in the Annex to this order, until such time as
the Secretary of Defense removes such person from such list;
(ii) any person that the Secretary of Defense, in consultation with the
Secretary of the Treasury, determines is a Communist Chinese military
company operating directly or indirectly in the United States or in any
of its territories or possessions and therefore lists as such pursuant to
section 1237 of Public Law 105–261, as amended by section 1233 of
Public Law 106–398 and section 1222 of Public Law 108–375, until such
time as the Secretary of Defense removes such person from such list;
or
(iii) any person that the Secretary of the Treasury publicly lists as meeting
the criteria in section 1237(b)(4)(B) of Public Law 105–261, or publicly
lists as a subsidiary of a person already determined to be a Communist
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Chinese military company, until the Secretary of the Treasury determines
that such person no longer meets that criteria and removes such person
from such list.
(b) the term ‘‘entity’’ means a government or instrumentality of such
government, partnership, association, trust, joint venture, corporation, group,
subgroup, or other organization;
(c) the term ‘‘person’’ means an individual or entity;
(d) the terms ‘‘security’’ and ‘‘securities’’ include the definition of ‘‘security’’ in section 3(a)(10) of the Securities Exchange Act of 1934, Public
Law 73–291, as codified as amended at 15 U.S.C. 78c(a)(10), except that
currency or any note, draft, bill of exchange, or banker’s acceptance which
has a maturity at the time of issuance of not exceeding 9 months, exclusive
of days of grace, or any renewal thereof the maturity of which is likewise
limited, shall be a security for purposes of this order.
(e) the term ‘‘transaction’’ means the purchase for value of any publicly
traded security; and
(f) the term ‘‘United States person’’ means any United States citizen,
permanent resident alien, entity organized under the laws of the United
States or any jurisdiction within the United States (including foreign
branches), or any person in the United States.
Sec. 5. The Secretary of the Treasury, in consultation with the Secretary
of State and, as appropriate, the Secretary of Defense, is hereby authorized
to submit the recurring and final reports to the Congress on the national
emergency declared in this order, consistent with section 401(c) of the
NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).
Sec. 6. General Provisions. (a) Nothing in this order shall be construed
to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency,
or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget
relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and
subject to the availability of appropriations.
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(c) This order is not intended to, and does not, create any right or benefit,
substantive or procedural, enforceable at law or in equity by any party
against the United States, its departments, agencies, or entities, its officers,
employees, or agents, or any other person.
THE WHITE HOUSE,
November 12, 2020.
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[FR Doc. 2020–25459
Filed 11–16–20; 8:45 am]
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]]>Agencies
[Federal Register Volume 85, Number 222 (Tuesday, November 17, 2020)]
[Presidential Documents]
[Pages 73185-73189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25459]
[[Page 73189]]
[GRAPHIC] [TIFF OMITTED] TD17NO20.000
[FR Doc. 2020-25459
Filed 11-16-20; 8:45 am]
Billing code 3295-F1-C
